The former Ireland and England U-19 head coach added: "This is a fantastically talented group of young players that will need a new coach to come in with a fantastic energy and take them forward.
"I have a farm, family and kids at home [in South Africa] and I don't get to see them. It's a really selfish decision and we decided as a team it was time for change."
Birrell secured three third-place finishes in the County Championship with the club finishing runners-up in 2024.
In the white-ball game he has made it to finals day on four occasions, and on Saturday he has the chance to win a second T20 Blast title with the club.
Hampshire director of cricket Giles White told the club website:, external "All good things come to an end, and we are sad to see Adi go.
"It's been a fantastic seven years at the club, during which he has become a hugely popular figure and overseen a successful period across all formats.
"Under his leadership, the team has reached numerous finals, come close in Championships, and lifted the Blast title in 2022.
"His contribution has left a lasting mark, and he will be deeply missed by players, coaches, and fans alike at the Utilita Bowl."